December 1, 2019 – December is one of the most popular months in the U.S. for acquiring new cars. But, should you buy or should you lease? On this month’s edition of Millennial Monday Josh Nunn, Crystal Kessler and Justine Hall explore the pros and cons of buying and leasing vehicles and explain what you need to know before you head into the dealership. They also discuss negotiation tips and what you should and shouldn’t do when it comes to purchasing or leasing your next car.
- Is It Better to Lease or Purchase an Automobile?
- Cost of Car Ownership
- Lease Market Report
- Car Depreciation Calculator
Crystal’s Dealership Dictionary:
- Manufacturer’s Suggested Retail Price (MSRP): The price the car manufacturer recommends for the dealership to sell the car, typically shown on the car’s window sticker.
- Capitalized Cost: The price of the vehicle, not the car’s MSRP. The cap cost reflects any discounts that you are able to negotiate.
- Cap Cost Reduction: Anything outside of negotiation that reduces the capitalized cost of a vehicle such as your trade in or special lease/buying deals offered by the vehicle’s manufacturer.
- Money Factor Scam: Money factor is used to confuse the leasing customer. It is the interest rate on funds that are financing the lease. It can’t be directly compared to car loan interest rates, but it can be used to compare different lease offers. To convert it into an interest rate, multiply the money factor by 2400. A money factor of .0025 would mean the interest rate is 6%. Some cars salesmen will try to confuse you and say it is 2.5% so be careful! If the result isn’t equal to or less than prevailing annual percentage rate (APR or essentially the interest you’re paying) for car purchases, you’ll know they’re marking up the money factor — and there’s room to talk it down.